Raoul Pal, a former Goldman Sachs executive, who is the founder and CEO of Real Vision, has recently explained why he invested majorly in Ethereum (ETH), the second-largest cryptocurrency by market capitalization, rather than flagship digital currency, Bitcoin (BTC).
Pal made this known in a recent interview with the popular Bitcoin maximalist, Anthony Pompliano, who is a co-founder of Morgan Creek, a digital assets investment firm. In the course of the conversation, he also discussed the impending global economic slowdown and what he’s doing to prepare for it.
Discussing his vast investment in Ethereum (ETH) compared to Bitcoin (BTC) and other cryptocurrencies as first reported by Daily Hodl, Raoul Pal said:
“My current allocation is probably 70% ETH [Ethereum], 5% Bitcoin, and then a tail of others. So why that allocation? It’s nothing against Bitcoin, it’s not against anything else. It’s because I’m a financial markets guy and we use risk curves. So at certain points in the cycle, in the middle of a bull market, you want to take as much risk as possible. So you want to go to the more speculative end of the market.
“I isolated the fact I thought Ethereum was going to see further flows, it’s early in its adoption cycle and that would probably drive prices further than Bitcoin. And that seems to be playing out.”
Regarding the outlook for the global economy, the crypto big gun said:
“The work that I’ve been doing suggests that the likelihood is the economy, the global economy, slows down pretty significantly into next year. And again, we might see more stimulus and more fiscal stimulus coming as well.
“So I look at it very differently to what most people are seeing, but on the horizon because of the fiscal cliff, we’ve got like 3.5% of GDP coming off from the fiscal cliff. We’ve got all of the spending brought forward that everybody, including me, did up their houses over the previous year.”